Georgia's Trusted Healthcare
& Medical Provider Attorneys

Federal Deadline for Pharmacy Compliance Plan Approaching – Are You Ready?

In an effort to contain the skyrocketing costs of the Medicaid and Medicare programs, the federal government enacted the Deficit Reduction Act of 2006. The Act is a sweeping cost cutting measure that will trim 11 billion dollars for the Medicaid and Medicare Programs over the next five years.

Buried amongst these cost cutting measures are new requirements for healthcare providers to enact Medicaid Compliance Plans. Though pharmacies are not traditionally thought of as “healthcare providers,” Section 6032 of the Act extend the Compliance Plan requirement to any entities receiving annual Medicaid payments of at least 5 million dollars.

Many independent and chain pharmacies are unaware that the Act requires that Compliance Plans be in place by January 1, 2007, and are not prepared to meet this statutory deadline. The Act requires any entity that meets the criteria to adopt policies and procedures and educate their employees, contractors and agents on various aspects of healthcare fraud enforcement. Included in these educational requirements are:

  • The federal False Claims Act;
  • administrative remedies for false statements under federal law;
  • any state laws establishing civil or criminal penalties for false claims or statements;
  • whistle blower protections under any applicable state or federal law;
  • the roles of such laws in preventing and detecting fraud, waste and abuse in federal healthcare programs;
  • the entities internal policies and procedures for detecting and preventing fraud, waste and abuse;
  • the entity’s Employee Handbook is required to contain specific discussion of the federal and state laws described above, the rights of employees to be protected as whistle blowers, and the entity’s internal policies and procedures for detecting and preventing fraud, waste and abuse.

For pharmacies chains with locations in multiple states, the employee and contractor education must be specific to the laws of every state the pharmacy is located.

It is important that Medicaid providers begin to review and revise their current compliance plans and policies including employees handbooks, to ensure that these documents meet the Act’s requirements.

Jeyaram & Associates can help you comply with these new federal mandates by integrating information into your existing compliance plan or by creating a new comprehensive compliance plan tailored to meet your needs. Contact us for a free consultation at 404.995.6792 or at

This article is presented for educational and informational purposes only and is not intended to constitute legal advice.

About the Author

Deepak (“D.J.”) Jeyaram is the founder of Jeyaram & Associates, a full service health law firm. He represents a wide variety of healthcare providers including hospitals, nursing homes and physician group practices. He concentrates his practice in healthcare regulatory matters, primarily in administrative appeals and Medicare and Medicaid reimbursement.

His prior experience includes working in-house with Georgia Medicaid, rising to the position of Deputy Director of Legal Services. Later in his career, Jeyaram was an Administrative Law Judge who presided over disputes between the Georgia Department of Community Health and Medicaid providers on issues involving reimbursement, utilization review and provider termination. Jeyaram received his bachelor’s degree, cum laude, from Boston University and his law degree from Emory University.